Rainy day fund legislation
Brendan Howlin asked when legislation for a rainy day fund would be introduced and questioned the fiscal rules around it. The Taoiseach said Cabinet had authorised drafting, the fund would be established in 2019, and legislation would need to be in place before then.
As this is my first opportunity to do so, I join others in expressing my horror and revulsion at the murders in recent days of a child, Ana Kriégel, and a young woman, Jastine Valdez.
I wish to ask the Taoiseach about reports that the Cabinet today discussed the introduction of legislation to establish a rainy day fund. When will this legislation be introduced? The fiscal rules will uniquely prohibit the deployment of a rainy day fund on a rainy day. The whole idea of having a reserve fund is to deploy it when one needs to do so, but the fiscal rules will work counter to that. Is it not more logical to expend money now to prevent that rainy day happening by ensuring we have investment in infrastructure and the deficiencies we have identified in recent years?
Comment on this
The Cabinet agreed this morning to give the Minister for Finance authorisation to draft the Bill to which the Deputy refers. The rainy day fund will be established in 2019, so-----
Comment on this
Yes, next year. Therefore, the legislation will obviously need to be in place sometime before the end of next year to allow the fund to be established, with €1.5 billion going in from the Ireland Strategic Investment Fund and €500 million being added per year. To answer the Deputy's question very frankly, a balance is required. Yes, we absolutely need to invest in infrastructure in order to allow our economy to continue to grow, allow our society to develop and remove bottlenecks. This is why we published Project Ireland 2040 before setting up the rainy day fund setting out how capital spending will increase from a relatively low level in Europe to one of the highest across the period of Project Ireland 2040. There will be a 25% increase in investment in public infrastructure next year alone. We are therefore very much providing for increased investment in public infrastructure, transport, housing, health and so on. However, we do not want to go back to the policy of the past, which was the philosophy of "when I have it, I spend it" because we all know where that leads. Quite soon afterwards, one does not have it any more. This is why we think it is prudent, at a time when the economy is growing very strongly, that we do balance the books and set aside a small surplus to prepare for inevitable downturns, shocks and economic problems that will arise at some point in the future.